New York passes tough new foreclosure law

Gov. David Paterson today signed into law a measure that dramatically strengthens consumer protections against foreclosure.

Even before the legislation, New York already had some of the nation’s toughest foreclosure laws. But Paterson proposed the new law, he said in a statement today, to assist homeowners currently at risk of foreclosure and to minimize the impact foreclosures have on neighborhoods.

The law:

Requires the 90-day pre-foreclosure notice currently sent for subprime loans to be expanded to include all home loans.

Requires those lenders who serve a 90-day notice on a homeowner to make a regulatory filing with the Banking Department within three days of that service with specified information.

Expands the scope of the early mandatory settlement conference to include borrowers of all home loans and not just borrowers with subprime loans.

Establishes protections for tenants in foreclosed properties by requiring that they receive written notification of the change in ownership of the property and be permitted to remain in their home for the remainder of their lease term or 90 days, whichever is longer.

Requires plaintiffs in a foreclosure action who obtain a judgment of foreclosure and sale to maintain the foreclosed property.

The Capital Region typically has some of the lowest foreclosure rates in the nation, so it’s hard to argue that the legislation will have a dramatic effect here. But parts of New York City and Long Island have had relatively high foreclosure rates.

Are there drawbacks to the legislation? Well, it could make it harder for first-time buyers to secure loans — in a market in which loans are already difficult to come by for those with less-than-perfect credit.

“Establishes protections for tenants in foreclosed properties by requiring that they receive written notification of the change in ownership of the property and be permitted to remain in their home for the remainder of their lease term or 90 days, whichever is longer.”

Great, I’ll lease my home to my daughter at $100.00/month for 99 years, then default on the loan.
This Gov. Patterson is great.

WOW makes me SO jealous that I do not own a bank that can give loans in New York that might never get repaid or be so strangled in government nonsense that I would be in court or foreclosure proccedings for all eternity.. In a state that ranks among the most business toxic and unfriendly already..Like if you actually give a loan what are the chances your client will keep their job to repay that loan?? Few and none?? Nobody works harder than New York government to totally trash every job ..business..and industry there is..

Yeah, the bill also appears to contain repealer clauses, like half of the other legislation passed in the state, so that after a certain amount of time passes, these provisions simply evaporate with no further action. The general problem that this approach creates is that it leaves our law in constant flux and leads to an enormous amount confusion for the people of the state – on one day, these provisions will available to protect them, the next day they won’t. But they won’t get any warning of it. These little land mines are planted by the legislature throughout New York State law.

The problem is, even if they think they will want to extend it when the time comes, Albany lawmakers aren’t reliable enough to make sure it happens. Take what we just witnessed earlier this year in June and July; there were scores of laws that were about to expire or had expired, everyone agreed that the laws ought to be “extended,” BUT they can’t get it done because the dolts in the Senate wouldn’t agree to go to work and convene a session. Instead, the just pull the old “gavel in and gavel out” routine.

The repealer clauses, like the one in this foreclosure bill, just end up add a lot to the congested gridlock in Albany and make it appear that the legislature has all this work to do, when, in fact, its just work they made for themselves. They are, in essence, building “gridlock for the future.” They use repealers as future bargaining chits to withhold reenactment of the few decent laws that are working until they get their quid pro quos and pork dollars in return. I can’t wait to vote out these people in November 2010.

I specialize in helping homeowners sell there homes when facing foreclosure. More and more banks are giving breaks and working with owners but the larger puzzle pieces are still missing to prevent equity theft, predatory lending, and educating people to what they can really afford. http://www.ClairFBee.com

I don’t see the problem in making it “harder for first time buyers to secure loans.” Maybe if all banks had followed this practice in the first place, we wouldn’t have so many foreclosures. There are people who will never be able to afford to buy a house – this is a reality that some just won’t accept. As a former holder of a mortgage, which I payed on time every month, I highly resent having to “help” out others with a mortgage that they should never have had in the first place.

Seems few here can see both sides of the coin. If I were a tenant, I’d sure like to know my home is in jeopardy. And I also support the idea that the bank or whoever is foreclosing, TAKE CARE OF THE PROPERTY. Pay back taxes, HOA fees, etc. Why the banks are held to these responsibilities in some states is beyond me.